By Andrew Kariuki

The Kenya Revenue Authority (KRA) has abolished the Nil Returns system and introduced a new “PIN with No Obligation” (PWO) category, marking a shift in how individuals with no taxable income remain compliant.

Under the new framework, taxpayers who are not engaged in any income-generating or taxable activities will no longer be required to file annual Nil Returns, a process that had previously been mandatory for compliance.

KRA said the change is aimed at improving the integrity of the taxpayer register while easing the burden on individuals who do not earn taxable income.

“iTax has been enhanced to enable Individual Taxpayers, both residents and non-Kenyan non-residents, to generate a PIN with No Obligation,” the Authority said.

The PWO category is expected to benefit groups such as students and other individuals who require a PIN for non-taxable purposes, including accessing services like higher education loans or conducting certain transactions.

However, KRA cautioned that individuals registered under the PWO category must update their status if they begin earning income or engaging in taxable activities.

Failure to do so will attract penalties, with the Authority noting that non-compliance may result in fines, including Ksh2,000 for individuals or higher amounts depending on the tax due.

The Authority also indicated that systems are still being updated to allow existing taxpayers with obligations to transition into the PWO category.

Applications for the new category can be made through the iTax portal, with a national identity card listed as the primary requirement.

The move comes amid ongoing enforcement efforts by KRA, with taxpayers earning income reminded to file their annual returns by June 30, 2026 to avoid penalties.